Digital health startup funding on track to hit $7B this year

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Dive Brief:

Investment in digital health startups is expected to reach $7 billion this year, up from $6.4 billion in 2016, a new Accenture analysis predicts.

The forecast would bring investor funding back to the 2015 level after slowing to $5.1 billion last year. Driving the growth spurt is strong international investment, particularly in China, India and Israel.

Nearly three-fourths of the 2016 funding focused on solutions that address affordability, access and care quality, with tools to enhance provider efficiency claiming $1.2 billion of the overall prize.

More than one-third of all investments (38%) went to 10 companies: Onduo, PING AN, Human Longevity, Guardant Health, iCarbonX, Chunyu Yisheng, Flatiron, Jawbone, Clover and Health Catalyst. Diabetes startup Onduo and Chinese insurance company PING AN were the top winners, snaring $500 million each.

Wearable fitness tracker Jawbone led the field in cumulative funding since 2010, with $737 million. Health Catalyst was second, with $446 million in investor funding.

Digital health has largely dodged the regulatory jitters around President Donald Trump and Republican lawmakers’ efforts to repeal the Affordable Care Act, in part because of the shift to value-based care, which has strong bipartisan support. At the same time, many healthcare organizations have begun investing in digital health as a way to diversify their revenues and be on the front lines of innovation, Accenture notes.

“There are a lot of really exciting things going on that are bundling together a lot of technological innovations of the last decade, like mobile, smartphones, sensors and sensor-enabled devices,” Unity Stoakes, cofounder and president of StartUp Health, told Healthcare Dive earlier this year. “The next wave of innovation will be someone who ties all these things together.”